Indonesia-focused miner Finders Resources (ASX:FND) has appointed a new general manager for its Wetar Copper Project in southern Sumatra.

Finders has a 95 per cent interest in the Wetar Copper Project, which is currently being developed to reach 7,000 tonnes per annum capacity.

Newly appointed Garry Kielenstyn doubled production to 100,000 gold equivalent oz per year in his last role as the Indonesian general manager at PT Indomuro Kencana, which operates Mt Muro Gold Mine in central Kalimantan, Borneo.

Finders’ managing director Chris Farmer said Kielenstyn’s local knowledge and operational expertise would make him a valuable addition to Finders. 

Farmer added: “We expect the Wetar copper project will receive final approvals in the near term and we are strengthening the team for commercial development. 

“Garry has the right mix of skills to complement the existing team and is joining us at an exciting time.”

Finders also has a 72 per cent stake in the Ojolali Gold‐Silver Project in Sumatra, Indonesia.

Finders Resources (ASX:FND) has been formally advised that the gazetting of the new spatial plan for the Province of Maluku in Indonesia is near completion, despite recent delays.

Finders said that a letter from BAPPEDA Maluku (Department of Regional Planning and Development) had informed it that the integrated team responsible for processing of final documentation for gazettal completed the documentation in the second week of April.  

The release of hard copy maps for formal signing by the Regents, Mayors and Governor of Maluku is now pending authorisation by the Minister of Forestry. 

Formal gazetting of the spatial plan is the final approval required before Finders starts work on construction of the Wetar copper mine in Indonesia.

Finders has a 95 per cent stake and is the operator of the Wetar copper project. 

It also has 72 per cent interest in the Ojolali old‐silver prospect Indonesia.

The Wetar development will see the brownfields expansion of an existing demonstration plant to 7,000tpa capacity followed an expansion of production to 25,000tpa.

Finders has already agreed offtake deals with Standard Bank and Tennant Metals for Wetar’s output.

Finders Resources (ASX:FND) said today it had completed a number of permits relating to its Wetar copper project in Indonesia.

The Regent of Maluku Barat Daya had signed off permits for power generation (up to 20 megawatts), permission for water use and the pipeline location permit.

A building permit, nuisance (noise/disturbance) permit and location permit have also been signed, the Australia-listed firm said.

Approval of the spatial plan by the Indonesian Minister of Forestry, however, has been delayed and rescheduled to the 29 February.

Finders’ managing director Chris Farmer said: “The new spatial plan is a complex process involving nine regencies, the province, the national forestry department and an expert team representing many stakeholders. 

I am pleased with the final outcome, which when formally declared will allow Finders to commence development at Wetar.”

He added: “The support the project receives from the Governor of Maluku and Regent of Maluku Barat Daya is a great advertisement for investment in Maluku. With credit approval from our bank consortium and a substantial number of permits in place, we are busily preparing for a restart of the demonstration plant and further expansions to 25,000 tpa copper cathode production.”

The Wetar Copper Project comprises two high grade deposits, Kali Kuning and Lerokis, located within 3km from the coast.

Finders is the operator of Wetar with a 95 per cent interest. It also has a 72 per cent interest in the Ojolali gold‐silver prospect in Indonesia.

Indonesia-focused miner Finders Resources (ASX:FND) said it is evaluating strategic alternatives for its Ojolali gold-silver project in southern Sumatra.

Finders, which has a 72 per cent stake, with option, in the Ojolali project has appointed investment manager Octa Phillip Financial, to assist with the evaluation.

Finders said: “The board believes the Ojolali project has considerable value and upside not currently reflected in the Finders share price and is considering options to accelerate the development of the project.”  

The Ojolali project is a 13 square kilometre gold-silver prospect in the Sumatran Gold Belt, in Lampung Province.

The miner’s principal project, the Wetar copper project which it has a 95 per cent interest in, is currently being developed to reach 7,000 tonnes per annum capacity.

Finders Resources (ASX:FND) has agreed an offtake agreement with Standard Bank for the copper produced from its Wetar mine in Indonesia.

The South African bank will subscribe for US$5.5 million through a convertible loan note in exchange for the right to buy up to 40 per cent of Wetar’s output.

The loan note will convert into ordinary shares at the end of six years or earlier at 42.7 Australian cents per share.

Standard Bank will pay market prices for the copper produced at Wetar over its life.

Standard Bank also said it would subscribe a further US$5.5 million in an equity raising to fund the construction of the mine, which will give it rights to a further 20 per cent Wetar’s copper. 

Standard Bank is also one of the lenders providing US$138 million in project finance for Wetar.   

Chris Farmer, Finders MD, said: “Standard Bank is a respected international bank and is experienced in funding resource projects around the world.

 They have made a significant long term commitment to Finders through both debt and equity funding, after extensive due diligence and review.”

Tennant Metals is marketing agent for the other 40 per cent of Wetar’s output and with Standard Bank Finders now has agreements in place for all of its copper production.

Finders has a 95 per cent stake and is the operator of the Wetar copper project. It also has 72 per cent interest in the Ojolali  old‐silver prospect in Indonesia.

Copper miner Finders Resources (ASX:FND) said the Indonesian government’s new mining regulations will have ‘no material impact’ for its Wetar Copper project.

It said the current corporate structure for Wetar project complies with the new divestment requirements, set out by the government, for mining companies in Indonesia.

Finders added that it does not expect to be required to undertake any further divestment under the new regulations during the life of Wetar.

The new regulation says that some foreign companies may be required to gradually reduce their interests in Indonesian mines to 49 per cent by the tenth year of production.

Australian company Finders has a 95 per cent interest in the Wetar Copper Project, which is currently being developed to reach 7,000 tonnes per annum capacity.

It also has a 72 per cent stake in the Ojolali Gold‐Silver Project in Indonesia.

Broker Octa Phillip Financial Group said: “We are not concerned with the Indonesian government policy in relation to Finders as they do not technically own the mine. 

“We understand Finders buy ore from the mine and pay a royalty back to the mine owners.”

Octa Phillip maintains a ‘buy’ recommendation and a target price of A$0.71.

Finders Resources (ASX:FND) has passed a “watershed” moment for its Wetar copper project after proposed changes to the forestry areas around the mine were approved.

Finders said the head of Spatial Planning, Maluku Province, said the forestry rezoning was presented and approved before the Minister of Forestry on 29th February 2012.

The next and final stage of the process is formal gazetting which is procedural only, Finders added.

Broker Blackswan said the approval was a “watershed” for Wetar and “greatly reduces” the timing risk associated with the construction of the project.

The project is forecast to have a C1 cash cost of US$1.09lb and based on a mid-cycle copper price of US$2.50lb Blackswan estimates Finders will generate an average EBITDA of $93 million per year.

Blackswan also sees potential for Finders to extend the expected nine- year mine life through further exploration.

“VMS deposits typically exist in clusters and the geologically setting of Wetar Island along the Banda Arc is an established setting for this type of mineralisation.

Satellite deposits of copper-bearing massive sulphide are known to exist on Wetar Island and provide a robust opportunity to expand the resource base.”

Finders is the operator and 95 per cent owner of the Wetar copper project. It also has 72 per cent stake in the Ojolali gold‐silver prospect in Indonesia.

Indonesia-focused Finders Resources Limited (ASX:FND) said private equity firm Resources Capital Fund has converted its maturing US$1,500,000 Convertible Note into Finders shares.

A total of 4,017,145 shares have been issued at an issue price of $0.36 per share.

Finders managing director, Chris Farmer commented: “We welcome RCF’s continued support for Finders as we move into the development phase of our high grade Wetar Copper Project. 

“RCF’s election to convert the Note is a strong endorsement of the robust quality of the Wetar project.”

Finders is the operator at Wetar copper project, in which it has a 95 per cent stake. It also has a 72 per cent stake in the Ojolali gold-silver project.

Finders Resources’ (ASX:FND) Wetar copper project has taken a major step forward after a US$138 million project finance package got the green light.

Financial heavyweights Barclays Capital, Credit Suisse and Standard Bank will make the money available in 2012 to fund the development of the Indonesian project.   

The facilities include a term loan of up to US$103 million to fund construction, a cost overrun facility of US$20 million and a working capital facility of US $15 million.  

Drawdown of the facilities is subject to completion of satisfactory documentation, permitting, securing and spending the project equity and implementation of an agreed hedging programme.      

Chris Farmer, Finders' managing director, said the financing was a significant vote of confidence in Wetar.

“In a very difficult global banking environment, all three mandated lead arrangers (MLAs) have received credit approvals. The three banks are recognised global leaders in mining project finance and their support speaks highly of the economics of the Wetar copper project and its long term viability.  

Finders is one of the few listed ASX pre‐production copper companies with a clear path and timeline to production. The coming months will be important for us as we move into the construction phase – 2012 will be a very big year for the company.”

He added that the key conversion of forestry status, which will allow formal commencement of the project, is in the final stages of documentation and Finders now expects the process to be completed in January, 2012.

The Wetar Copper Project comprises two high grade deposits, Kali Kuning and Lerokis, located within 3km from the coast.

Finders is the operator of the Wetar copper project with a 95 per cent stake. It also has 72 per cent interest in the Ojolali gold‐silver prospect in Indonesia.

The processing plant for Finders Resources’ (ASX:FND) Wetar copper project has arrived in the Indonesian port of Kupang in West Timor, the group said today. 

The plant consists of more than 50 forty-foot containers and 2,400 cubic metres of break bulk and was successfully operating at the Whim Creek mine in Western Australia until 2009 and before that in Girilambone in NSW.    

The plant has a nameplate capacity of 18,000 tpa and was purchased by Finders from Straits Resources.    

It will provide a significant capital cost saving relative to construction of a new plant, the company said.

Finders’ managing director Chris Farmer added that the arrival of the equipment in Indonesia was another step toward realising the potential of the Wetar copper project.

“While there is a lot of hard work ahead for us at Finders, we are preparing for construction, after successfully de‐risking the project during the demonstration phase” Mr Farmer said.

The Wetar Copper Project comprises two high grade deposits, Kali Kuning and Lerokis, located within 3km from the coast and suitable for open pit mining.

Australia-listed Finders intends to use the Whim Creek plant to expand Wetar’s capacity from the 7,000tpa to 25,000tpa.

Finders is the operator of the Wetar copper project with a 95 per cent interest.

It also has 72 per cent stake in the Ojolali gold‐silver prospect, also in Indonesia.

Adds broker comments....

Finders Resources (ASX:FND) said yesterday it had hired a group of banks to arrange a US$138 million project financing deal to bring the Wetar copper project into commercial production.

Last month the company completed a bankable feasibility, which confirmed that the Indonesian copper project has robust economic viability and gave it a value of US$304 million.

It revealed that Barclays Capital, Credit Suisse and Standard Bank have been appointed mandated lead arrangers (MLAs) for loan facilities totalling US$138 million.

They will provide a US$103 million loan facility to fund construction, a US$20 million cost-overrun facility will be put in place to cover unforeseen increases in project costs. 

Another US$15 million will be made available to cover working capital requirements, like short-term tax obligations.

“After the successful demonstration stage leading to a positive BFS result, Finders is on the brink of realising our goal of commercial production,” said managing director Chris Farmer.

“This appointment builds on momentum gained by the recent granting of the key mining and processing permits and the release of the Bankable Feasibility Study in June.”    

“Standard Bank, Credit Suisse AG and Barclays Capital were appointed after an extensive selection process and are proven partners for mining projects around the world, particularly in Indonesia. The calibre of the banks supporting the project is a reflection of Wetar’s sound economic credentials.   We are looking forward to a successful relationship.”          

Finders said it expects to get clearance for the financing package by September.

Broker FinnCap welcomed news of the financing. "We interpret this agreement as a strong endorsement of the Wetar project, given the level of due diligence that will have already been completed to get to this stage," said analyst Martin Potts in a note.

"The package represents a 67:34 debt to equity ratio, which is a good result considering the relatively weak markets. Finders will need to find US$52million to complete the project financing and presumably a little extra to cover the corporate overhead and other planned work," he added.

The broker also highlighted that the one outstanding item is the need for the Indonesian Government to complete the forestry re-zoning. This will convert the great majority of the proposed mine site from conversion forest to open ground.

This is a requirement before construction can commence. The process is currently on hold for Ramadan but is expected to be completed no later than December 2011.

"The current ‘best guess’ is that it will be completed in late September or October," added the broker.

Finders Resources (ASX:FND) has hired a group of banks to arrange a US$138 million project financing deal to bring the Wetar copper project into commercial production.

Last month the company completed a bankable feasibility, which confirmed that the Indonesian copper project has robust economic viability and gave it a value of US$304 million.

Today it revealed that Barclays Capital, Credit Suisse and Standard Bank have been appointed mandated lead arrangers (MLAs) for loan facilities totalling US$138 million.

They will provide a US$103 million loan facility to fund construction, a US$20 million cost-overrun facility will be put in place to cover unforeseen increases in project costs. Another US$15 million will be made available to cover working capital requirements, like short‐term tax obligations.

“After the successful demonstration stage leading to a positive BFS result, Finders is on the brink of realising our goal of commercial production,” said managing director Chris Farmer.

“This appointment builds on momentum gained by the recent granting of the key mining and processing permits and the release of the Bankable Feasibility Study in June.”    

“Standard Bank, Credit Suisse AG and Barclays Capital were appointed after an extensive selection process and are proven partners for mining projects around the world, particularly in Indonesia. The calibre of the banks supporting the project is a reflection of Wetar’s sound economic credentials.   We are looking forward to a successful relationship.”          

Finders said it expects to get clearance for the financing package by September.

The development of Wetar comprises the brownfields expansion of the existing demonstration plant to 7,000 tonnes per annum capacity, followed by incorporation of the Whim Creek plant to lift production to 25,000 tpa.

City broker finnCap said that the award of the permits removes the biggest obstacle that has so far prevented full development.

Analyst Joe Lunn continues to view Wetar as one of the best underdeveloped copper projects in the world, valuing Finders at 77 cents per share.

Finders called the deal an important step in a broader restructuring of the project as it approaches commercial production, adding that it also provides tax benefits.

As Finders' local partner, BKP is the legal holder of the Wetar mining tenements, held a minority interest in Banda and was entitled to a royalty on the Wetar project equal to 5% of net profits.

To ensure compliance with the new Indonesian mining regulations, Finders has reached commercial agreement to merge PT Batutua Tembaga Raya (BTR) with BKP to move to full ownership of the mining tenements and extinguish the royalty.

Under the terms of the deal, BTR shareholders will be entitled to a 5% interest in the merged entity, with Finders holding a 95% interest.

The company said that it is currently reviewing the legal and taxation mechanics of the merger and will develop a  timetable to complete the transaction in due course.

At 31 December 2010, BKP's interest in Banda had been diluted to 3.7% through project expenditure.

In late October, Finders reported that the Wetar project’s demonstration plant in Indonesia was operating as forecast and on budget, with 341 tonnes of copper cathode being produced in the third quarter ended 30 September 2010.

Around 361 tonnes were sold in the quarter at an average price of A$7,227 per tonne.

Later in 2010, Finders decided to delist from the AIM market of the London Stock Exchange and retain only its Australian listing.

The cancellation will take effect on 26 January 2011, which means that 25 January will be the last day of trading of Finders’ shares on AIM.

The company simultaneously announced the appointment of James Wentworth as finance director.

Finders’ new finance director started his career with law firm Feez Ruthning in Brisbane before joining Macquarie Bank in their Project and Structured Finance and Corporate Advisory divisions in Sydney and Wellington.

He then moved to New York and worked in the Mergers and Acquisitions division of Lehman Brothers for three years before joining Goldman Sachs' Principal Investment Area.

He has spent the last nine years with Sydney-based private equity firm CHAMP Ventures where he was a director and member of the Investment committee.

The cancellation will give shareholders currently trading on AIM access to the greater liquidity available on the ASX, the group said.

Less than 2 percent of Finders’ shares in issue are currently traded on AIM.

“Finders continues to welcome investment from London and other European institutions and will be maintaining its UK marketing programme through the retention of FinnCap Ltd as joint broker and research provider,” the company said in the statement.

The cancellation will take effect on 26 January 2011, which means that 25 January will be the last day of trading of Finders’ shares on AIM.

All shareholdings held through Finders' UK share registry will be migrated to Finders Australian share registry (managed by Computershare) following the cancellation date.

Shareholders will be able to transfer their holding before this date if they so choose.

Finders is focused on the Wetar copper project in Indonesia.

In October, the company told investors that the Wetar project’s demonstration plant in Indonesia was operating as forecast and on budget, with 341 tonnes of copper cathode being produced in the third quarter ended 30 September 2010.

Around 361 tonnes were sold in the quarter at an average price of A$7,227 per tonne.

The demonstration plant has now produced approximately 2,253 tonnes of copper cathode since February 2009.

Finders said that leaching rates have slowed because no new ore has been stacked on Heaps 1-3 since early 2009, this level of production was anticipated and it is in line with the its earlier recovery curve predictions.

The next phase of the Wetar project will see the ‘Stage 1’ expansion of the demonstration plant for a 7,000 tonnes per annum (tpa) operation.

In August Finders raised A$20.9 in a share placing to support the Wetar development.

Finders said it is currently in the final stages of hiring contractors and suppliers for the construction phase.

The company is also working on the design for Stage 2, where the recently acquired Whim Creek plant will be relocating to Wetar leading to a further expansion to 23,000 tpa.

The export documentation is being finalised to take the Whim Creek equipment from Australia to Indonesia, and Finders expects to be ready to mobilise the equipment in the first quarter of 2011.

Additionally the company highlighted that it has completed the final documentation in support of its mining permit application.

However it cautioned that permitting may be delayed due to local elections in Indonesia.

Elsewhere, at the Ojolali project in Sumatra Finders, had been drilling on the Tambang gold-silver system, to test near surface mineralisation.

The program identified a new high grade gold-rich shoot, with a seven metre intersection grading 5.62 grams per tonne (g/t) gold and 70 g/t silver at a depth of 55 metres. The intersection formed part of a broader 24 metres which had a grade of 1.84 g/t gold, 38 g/t silver and 0.56% zinc.

“The results have highlighted the continuity of wide zones of near surface gold-silver mineralization, and importantly demonstrated previously unrecognized potential for gold rich shoots within the system”, Finders said.

Additionally Finders said it expects to receive a new resource estimate in November, for the bulk low grade Jambi target at Ojolali.

Shareholders voted in favour of the capital raising at a shareholder meeting held today in Sydney, the group said in a statement to the London Stock Exchange.

Shares moved up nearly 5 percent on the news, and were up at 21.50p in late morning London trade.

The total capital raising amounted to A$20.95 million via a placement to institutional and sophisticated investors. Under the offer, new ordinary shares will be issued at A$0.28 per share, a discount of approximately 10% to the trading price of Finders shares prior to announcement of the raising.

The funds will be applied to the near term development of the Wetar project as well as capital equipment purchases, payment of environmental bonds and relocating the Whim Creek solvent extraction and electrowinning (SX/EW) plant from Australia.

The company will also complete a revised capital estimate for the planned expansion to 23,000 tonnes per annum (tpa) copper cathode.

Finders noted that its shares have traded well above the placing price since it was announced, most recently around A$0.37.

“I believe this shows that the market is beginning to  appreciate the future of the company and its long term prospects," said chairman Russell Fountain.

“Finders is one of very few emerging copper plays for Australian investors.

“The robust economics underpinning our Wetar project, combined with the experience of our management and the support of the local Indonesian community, auger well for a healthy and profitable future for the company,”  Fountain added.

In its quarterly operations report, Finders noted a solid performance as it moves the Wetar copper project towards commercial production.

During the second quarter to end-June 2010, the company completed upgrades to Wetar’s demonstration plant ahead of schedule.

Finders said that the demonstration plant’s current performance has been steady, with 416 tonnes of ‘Grade A’ cathode being produced in the quarter, equating to 4.6 tonnes of copper per day. The company sold 439 tonnes during the period with an average price of US$7,100 per tonne.

The company is also targeting completion of a scoping study for the gold and silver deposits at its Ojolali gold‐silver project in Sumatra.

Based on the results to date, the interpretation is that Finders could be at the top of a larger epithermal system - which could suggest large potential for additional discoveries at depth.

The drilling program was designed to test for near surface mineralization, with potential to provide additional feed for a start up mining operation based on the Jambi oxide gold resource.

Highlights include the new high grade gold-rich shoot that is completely open at depth with an intersection of 7m grading 5.62 g/t Au and 70 g/t Ag from 55m depth within a broader intercept of 24m grading 1.84 g/t Au and 38 g/t Ag and 0.56% Zn from 49m depth in TBGR 29.

Further high grade shallow silver intersections, including:
- 13m grading 184 g/t Ag and 0.41 g/t Au from 23m in TBGR 21;
- 20m grading 128 g/t Ag and 0.39 g/t Au from 52m depth in TBGR19; and
- 1m grading 658 g/t Ag and 0.52 g/t Au from 30m depth in TBGR 20.

Russell Fountain, chairman, said the results have demonstrated the ability to expand the inventory of near-surface oxide mineralization at Ojolali, and continue to emphasise the discovery potential of the project.

“This program tested approximately 600m of the known +2km strike length of the Tambang vein system."

"The results have highlighted the continuity of wide zones of near surface gold-silver mineralization, and importantly demonstrated previously unrecognized potential for gold rich shoots within the system, as evidenced by the intersections in TBGR25 and 29, which are completely open at depth."

“Based on these Tambang results and the previously announced Jambi drilling, we are now instituting a program of metallurgical test-work, including bottle roll testing, as a basis for a scoping study for development of a leaching operation based on both prospects.”

The Tambang mineralization comprises a west dipping fault controlled swarm of quartz and manganese veins, hosted mainly in a siltstone unit separating basement basalts from a locally tuffaceous andesitic rock sequence.

Finders shares resumed trading on the ASX today following announcement of the placement.

The placement will be made in two tranches:

- Tranche 1 comprising the placement of 28.07 million shares to raise $7.86 million, to be issued immediately under the Company’s available 15% capacity under Australian Securities Exchange Limited (ASX) Listing Rule 7.1, and;
- Tranche 2 comprising the placement of 46.75 million shares to raise $13.09 million, subject to shareholder approval at a general meeting to be held on or around Thursday, 30 September 2010.

The placement was managed by Western Australian based stockbroker Blackswan Equities Limited.

Russell Fountain, chairman, said: “I welcome the strong support investors have shown Finders through this placement. There was strong demand overall. We are very pleased with the support we received from our existing cornerstone shareholders, Resource Capital Funds, Taurus Funds Management, Acorn Capital and Straits Resources."

"Also pleasing is the fact that through Blackswan we have been joined by several new institutional investors and a strong spread of sophisticated investors."

“Finders is now ready to make the crucial step into production following years of study, implementation and planning. We have proven and de‐risked the Wetar operation with our successful demonstration plant which has been operating for more than a year," Fountain added.

In its quarterly operations report, Finders noted a solid performance as it moves the Wetar copper project towards commercial production. During the second quarter to end-June 2010, the company completed upgrades to Wetar’s demonstration plant ahead of schedule.

Finders said that the demonstration plant’s current performance has been steady, with 416 tonnes of ‘Grade A’ cathode being produced in the quarter, equating to 4.6 tonnes of copper per day. The company sold 439 tonnes during the period with an average price of US$7,100 per tonne.

“On completion of the placement we will focus on expanding the demonstration plant to 7ktpa capacity of copper cathode once permitting is finalised."

Finders is one of very few emerging copper players with real potential to become producers for Australian investors.

"The robust economics underpinning our Wetar project, combined with the experience of our management and the support of the local Indonesian community auger well for a healthy and profitable future for the company,” Fountain said.

The company is also targeting completion of a scoping study for the gold and silver deposits at its Ojolali gold‐silver project in Sumatra.

In its quarterly operations report, Finders noted a solid performance as it moves the Wetar copper project towards commercial production. During the second quarter to end-June 2010, the company completed upgrades to Wetar’s demonstration plant ahead of schedule.

Finders said that the demonstration plant’s current performance has been steady, with 416 tonnes of ‘Grade A’ cathode being produced in the quarter, equating to 4.6 tonnes of copper per day. The company sold 439 tonnes during the period with an average price of US$7,100 per tonne.

“On completion of the placement we will focus on expanding the demonstration plant to 7ktpa capacity of copper cathode once permitting is finalised."

Finders is one of very few emerging copper players with real potential to become producers for Australian investors.

"The robust economics underpinning our Wetar project, combined with the experience of our management and the support of the local Indonesian community auger well for a healthy and profitable future for the company,” Fountain said.

The company is also targeting completion of a scoping study for the gold and silver deposits at its Ojolali gold‐silver project in Sumatra.